There is abundant literature out there that has discussed various iterative models and techniques used for product development to help product strategists and managers build the products their customer wants and achieve business success. They are great and no one can deny the importance of experimental approaches to the success of any product strategy execution and pivot or refreshing it over time.
However, when it comes to medium and large companies, it is easier said than done. Each one has its challenges that can derail the best product strategy and its execution.

In this post, I would like to shed some light on common themes I have encountered throughout my career as a product leader and strategist.

Company Culture

“Culture eats strategy for breakfast” – Peter Drucker.

Whether it is an established product company or setting off on their product’s journey, your organization’s culture is the first thing you need to spend time analyzing before you start thinking about building any strategy. I found the Cultural Web, a model developed by Johnson and Scholes, is a great start to see and understand the different influences and dynamics that affect organisational culture.

As a product strategist, you will need to be innovative but always think about your strategy in the context of your organization’s culture and its external environment. Although there is no one size fits all, I created my reference “Operating” model to help me bootstrap at any new environment. It doesn’t cover every aspect of an operating model to execute your strategy successfully, but it provides a basic and common theme that has helped me create successful products that resonate with the market.

HiPPOs & the Low Hanging Fruit

HiPPO is an acronym for the “highest-paid person in the office”, and their opinion does matter “I believe this will be a great product or feature that people love!” Or, “The CEO wants that and we don’t want to upset him.” Does it sound familiar?

When a HiPPO has a strong opinion about your product strategy, the only way to deal with that is by working closely with them and continuously socializing what you are working on. I noticed that when a strategy is presented to them they tend to focus on the large and costly parts and overlook (or pretend to) low-cost low-hanging fruit and quick wins, and that’s your entry point. Quick wins allow you to show business results fairly quickly and gain more credibility and trust from your HiPPOs and that will make them feel more comfortable when you refresh strategy document in 6 months or so based on the quick wins findings. After all, product strategy is a living document, and updating it should be part of the strategy itself.

Focus on low-hanging fruit and quick wins to show value and gain credibility, quickly!

Incubation

Sometimes, creating an incubation structure within the organization can be critical to its success. The idea is not new and has been implemented by companies and governments to spur innovation and reduce the negative impact of the surrounding environment. It is enough sometimes to know that something exists for the reader to start researching so I won’t delve more in this post on how incubation should be set up.

Instead, I would like to mention an important cultural side to it that is often overlooked: Giving the company business unit leaders a sense of security! You don’t want to be seen as a disruptor who will flip their operations upside down and get them out of their comfort zone, also don’t expect they give you a higher priority than what they already have in hand! There where incubation helps.

Within your newly created incubation structure, you can disrupt and experiment the way you want without having the organization culture to work against you. Once your product reaches a scale-up phase, you hand its operations over to an established business unit and continue to iterate over it or build a new product within your incubator, and so on.

If possible, introduce an incubator within the organization with the right culture while being isolated from the complexity of  your organizations.

Create a Sense of Crisis

You want to influence culture and make your life easier? Create a crisis at your organization and show them how your strategy addresses it.

The best crisis can be created by comparing where are now with where your strongest competitors are and what they are planning. To do that, you need to constantly research your competitors and participate in events where their executives and senior management staff go. Oftentimes no one of them will reveal their plans but talking to a bunch of them enables you to connect some dots.

Funding Model

Typically, you will be requested to create a business case for any product you would like to build, present it to the investment committee, and get it approved.

This approach makes sense if you are replicating something that already exists such as a service, product, building, service station.. etc. But it becomes less relevant for innovative technology products that still no one knows their business value. You can provide some estimates and assumptions based on hunches and previous experience or some market research at best, but in most cases, they won’t stand the first test of time and will amplify failure.

Another way is to allocate funds to each product line is that you or your product line manager have the flexibility of reallocating, rebalancing, scrapping, or doubling down on products that show signs of success without the need to get layers or approvals that take days if not weeks without much value.

If you couldn’t get yourself the authorization to control the budget you are after, establish a product council that is responsible for adjusting and controlling spending amongst other tasks such as refreshing the product strategy.

Procurements & the Curse of Contracts

Whether your company operates completely through vendors, has its internal capable teams, or following a hybrid model, you will need to go through the pain of procurements because innovation is now more about collaboration with other parties rather than trying to do everything on your own.

There are different types of contracts but the most common ones are Time & Material, and Scope contracts. “Skin in the game” contracts have drawn increasing attention in the past few years to move to a risk-sharing model.

Time & Material (T&M) is way more flexible than Scope contract, but the moment you propose it to your procurements division, their eye pupil expands and they switch to survival mode! It makes them feel as if they were signing off to a blanket cheque while losing the control they have had and enjoyed for long before you come.

My solution is to merge T&M and Scope contracts in one contract that has the following characteristics:

• Utilizes agile story points on Fibonacci scale. Each step of the scale has a cost associated with it. It is like having units and each has its price
  • Example: 2 story points cost $10, 3 cost $13.5 … etc
• Capped by a specific amount
• A process to resolve conflicts that arise during analyzing Epic/Story points with the vendor
• It gives your product managers flexibility and at the same time introduces delivery units that give better control to procurements and finance folks
• It can be tricky during the tender evaluation, so I usually give bidders a large list of stories/epics to provide their story point and delivery time estimates. Best teams are the experienced and fast, and you need to reflect that in your evaluation criteria

It is not straightforward to persuade procurements and finance to adapt story points in contracts. But starting small and showing value always pays off. You just need to give them the confidence to try something they have never done before and also consider the liability and responsibility they have to make sure money is spent in the company’s best interest.

I hope your life will be a bit easier now after reading this post :).